[Federal Register Volume 79, Number 116 (Tuesday, June 17, 2014)]
[Rules and Regulations]
[Pages 34444-34452]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-14070]
[[Page 34444]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 412
[CMS-1599-N]
RIN 0938-ZB17
Medicare Program; Additional Extension of the Payment Adjustment
for Low-Volume Hospitals and the Medicare-Dependent Hospital (MDH)
Program Under the Hospital Inpatient Prospective Payment Systems (IPPS)
for Acute Care Hospitals for Fiscal Year 2014
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Extension of a Payment Adjustment and a Program.
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SUMMARY: This document announces changes to the payment adjustment for
low-volume hospitals and to the Medicare-dependent hospital (MDH)
program under the hospital inpatient prospective payment systems (IPPS)
for the second half of FY 2014 (April 1, 2014 through September 30,
2014) in accordance with sections 105 and 106, respectively, of the
Protecting Access to Medicare Act of 2014 (PAMA).
DATES: Effective Date: June 12, 2014.
Applicability Dates: The provisions described in this document are
applicable for discharges on or after April 1, 2014 and on or before
September 30, 2014.
FOR FURTHER INFORMATION CONTACT:
Michele Hudson, (410) 786-5490.
Maria Navarro, (410) 786-4553.
Shevi Marciano, (410) 786-2874.
SUPPLEMENTARY INFORMATION:
I. Background
On April 1, 2014, the Protecting Access to Medicare Act of 2014
(PAMA) (Pub. L. 113-93) was enacted. Section 105 of PAMA extends
changes to the payment adjustment for low-volume hospitals for an
additional year, through March 31, 2015, that is, through the first 6
months of fiscal year (FY) 2015. Section 106 of PAMA extends the
Medicare-dependent, small rural hospital (MDH) program for an
additional year, through March 31, 2015, that is, through the first 6
months of FY 2015. This document addresses payment for these programs
only for the second half of FY 2014 (April 1, 2014 through September
30, 2014). We proposed to implement the statutory changes for the first
half of FY 2015 (October 1, 2014 through March 31, 2015) in the FY 2015
IPPS/LTCH PPS proposed rule that appeared in the May 15, 2014 Federal
Register.
II. Provisions of the Document
A. Extension of the Payment Adjustment for Low-Volume Hospitals
1. Background
Section 1886(d)(12) of the Social Security Act (the Act) provides
for an additional payment to qualifying low-volume hospitals that are
paid under the Inpatient Prospective Payment Systems (IPPS) beginning
in FY 2005. Sections 3125 and 10314 of the Affordable Care Act provided
for a temporary change in the low-volume hospital payment policy for
FYs 2011 and 2012. Section 605 of the American Taxpayer Relief Act of
2012 (ATRA) extended, for FY 2013, the temporary changes in the low-
volume hospital payment policy provided for in FYs 2011 and 2012 by the
Affordable Care Act. Section 1105 of the Pathway for SGR Reform Act of
2013 extended, for the first 6 months of FY 2014 (that is, through
March 31, 2014), the temporary changes in the low-volume hospital
payment policy originally provided for by the Affordable Care Act and
extended through subsequent legislation.
We addressed the extension of the temporary changes to the low-
volume hospital payment policy through March 31, 2014 under the Pathway
for SGR Reform Act in an interim final rule with comment period (IFC)
that appeared in the March 18, 2014 Federal Register (79 FR 15022
through 15025) (hereinafter referred to as the FY 2014 IPPS IFC). In
the FY 2014 IPPS IFC, we also amended the regulations at 42 CFR 412.101
to reflect the extension of the temporary changes to the qualifying
criteria and the payment adjustment for low-volume hospitals through
March 31, 2014 in accordance with section 1105 of the Pathway for SGR
Reform Act.
2. Low-Volume Hospital Payment Adjustment Under the Temporary Changes
(Originally Provided by the Affordable Care Act) for FYs 2011 Through
2013 and FY 2014 Discharges Occurring Before April 1, 2014
For FYs 2011 and 2012, sections 3125 and 10314 of the Affordable
Care Act expanded the definition of low-volume hospital and modified
the methodology for determining the payment adjustment for hospitals
meeting that definition. Specifically, the provisions of the Affordable
Care Act amended the qualifying criteria for low-volume hospitals under
section 1886(d)(12)(C)(i) of the Act to specify that, for FYs 2011 and
2012, a hospital qualifies as a low-volume hospital if it is more than
15 road miles from another subsection (d) hospital and has less than
1,600 discharges of individuals entitled to, or enrolled for, benefits
under Part A during the fiscal year. In addition, section
1886(d)(12)(D) of the Act, as added by the Affordable Care Act,
provides that the low-volume hospital payment adjustment (that is, the
percentage increase) is to be determined ``using a continuous linear
sliding scale ranging from 25 percent for low-volume hospitals with 200
or fewer discharges of individuals entitled to, or enrolled for,
benefits under Part A in the fiscal year to 0 percent for low-volume
hospitals with greater than 1,600 discharges of such individuals in the
fiscal year.'' We revised the regulations at 42 CFR 412.101 to reflect
the changes to the qualifying criteria and the payment adjustment for
low-volume hospitals according to the provisions of the Affordable Care
Act in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50238 through 50275
and 50414). In addition, we also defined, at Sec. 412.101(a), the term
``road miles'' to mean ``miles'' as defined at Sec. 412.92(c)(1), and
clarified existing regulations that a hospital must continue to qualify
as a low-volume hospital in order to receive the payment adjustment in
that year (that is, it is not based on a one-time qualification).
Section 605 of the ATRA extended the temporary changes in the low-
volume hospital payment policy provided for in FYs 2011 and 2012 by the
Affordable Care Act for FY 2013, that is, for discharges occurring
before October 1, 2013. We announced the extension of the Affordable
Care Act amendments to the low-volume hospital payment adjustment
requirements under section 1886(d)(12) of the Act for FY 2013 pursuant
to section 605 of the ATRA in a notice of extension that appeared in
the March 7, 2013 Federal Register (78 FR 14689 through 14694).
Section 1105 of the Pathway for SGR Reform Act extended, for the
first 6 months of FY 2014 (that is, through March 31, 2014), the
temporary changes in the low-volume hospital payment policy originally
provided by the Affordable Care Act. In the FY 2014 IPPS IFC (79 FR
15022 through 15025), we implemented the extension of the Affordable
Care Act amendments to the low-volume hospital payment policy through
March 31, 2014 under the Pathway for SGR Reform Act. In that IFC, we
also amended the regulations at 42 CFR 412.101 to reflect the extension
of the temporary changes to the qualifying criteria and the payment
adjustment for low-volume hospitals through March 31, 2014.
[[Page 34445]]
To implement the extension of the temporary change in the low-
volume hospital payment policy through the first half of FY 2014 (that
is, for discharges occurring through March 31, 2014), in the FY 2014
IPPS IFC we updated the discharge data source used to identify
qualifying low-volume hospitals and calculate the payment adjustment
(percentage increase) for FY 2014 discharges occurring before April 1,
2014. Specifically, for FY 2014 discharges occurring before April 1,
2014, consistent with our historical policy, qualifying low-volume
hospitals and their payment adjustment were determined using Medicare
discharge data from the March 2013 update of the FY 2012 MedPAR file,
as these data were the most recent data available at the time of the
development of the FY 2014 payment rates and factors established in the
FY 2014 IPPS/LTCH PPS final rule. Table 14 of the FY 2014 IPPS IFC
(which is available only through the Internet on the CMS Web site at
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the hospitals with fewer than 1,600
Medicare discharges based on that Medicare discharge data and their
potential FY 2014 low-volume payment adjustment (for hospitals that
also meet the mileage criterion specified at 42 CFR 412.101(b)(2)(ii)).
Similar to our previously established procedure, in the FY 2014
IPPS IFC we implemented the following procedure for a hospital to
request low-volume hospital status for FY 2014 discharges occurring
before April 1, 2014. In order for the applicable low-volume percentage
increase to be applied to payments for its discharges beginning on or
after October 1, 2013 (that is, the beginning of FY 2014), a hospital
must have made its request for low-volume hospital status in writing
and this request must have been received by its Medicare Administrative
Contractor (MAC) no later than March 31, 2014. Requests for low-volume
hospital status for FY 2014 discharges occurring before April 1, 2014
that were received by the MAC after March 31, 2014 were to be processed
by the MAC; however, the hospital would not be eligible to have the
low-volume hospital payment adjustment at Sec. 412.101(c)(2) applied
to its FY 2014 discharges occurring before April 1, 2014. We also
explained that the low-volume hospital payment adjustment at Sec.
412.101(c)(2) would not be prospectively applied in determining
payments for the hospital's FY 2014 discharges, because, at that time,
beginning on April 1, 2014, the temporary changes to the low-volume
hospital payment policy provided for by the Pathway for SGR Reform Act
would have expired and the low-volume hospital definition and payment
methodology would have reverted back to the statutory requirements that
were in effect prior to the amendments made by the Affordable Care Act.
If the hospital would have otherwise met the criteria to qualify as a
low-volume hospital under the temporary changes to the low-volume
hospital policy, the MAC was to notify the hospital that, although the
hospital met the low-volume hospital criteria set forth at Sec.
412.101(b)(2)(ii) and would have had low-volume hospital status within
30 days from the date of the determination, the hospital did not meet
the criteria for low-volume hospital status applicable for discharges
occurring on or after April 1, 2014 at that time (79 FR 15022 through
15025).
3. Implementation of the Extension of the Temporary Changes to the Low-
Volume Hospital Payment Adjustment for FY 2014 Discharges Occurring on
or After April 1, 2014 Through September 30, 2014
Section 105 of the PAMA (Pub. L. 113-93) extends, for an additional
year (that is, through March 31, 2015), the temporary changes in the
low-volume hospital payment policy provided for in FYs 2011 and 2012 by
the Affordable Care Act and extended through FY 2013 by the ATRA and
the first half of FY 2014 by the Pathway for SGR Reform Act. Prior to
the enactment of the PAMA, beginning with discharges occurring on or
after April 1, 2014, the low-volume hospital definition and payment
adjustment methodology was to return to the policy established under
statutory requirements that were in effect prior to the amendments made
by the Affordable Care Act as extended by subsequent legislation.
Section 105 of the PAMA extends the Affordable Care Act amendments to
the low-volume hospital payment policy by amending sections
1886(d)(12)(B), (C)(i), and (D) of the Act. Specifically, section 105
of the PAMA amends section 1886(d)(12)(B) of the Act by striking ``in
the portion of fiscal year 2014 beginning on April 1, 2014, fiscal year
2015, and subsequent fiscal years'' and inserting ``in fiscal year 2015
(beginning on April 1, 2015), fiscal year 2016, and subsequent fiscal
years''; amends section 1886(d)(12)(C)(i) by striking ``fiscal years
2011, 2012, and 2013, and the portion of fiscal year 2014 before'' and
inserting ``fiscal years 2011 through 2014 and fiscal year 2015 (before
April 1, 2015),'' each place it appears; and amends section
1886(d)(12)(D) of the Act by striking ``fiscal years 2011, 2012, and
2013, and the portion of fiscal year 2014 before April 1, 2014,'' and
inserting ``fiscal years 2011 through 2014 and fiscal year 2015 (before
April 1, 2015),''.
In the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28090 through
28092), we proposed to implement the extension of the temporary changes
to the low-volume hospital payment policy for the first half of FY 2015
and stated our intent to address the extension of those changes for the
second half of FY 2014 (that is, from April 1, 2014 through September
30, 2014) as provided for by the PAMA in a forthcoming Federal Register
notice. In that proposed rule, we also proposed to make conforming
changes to the existing regulations text at Sec. 412.101 to reflect
the extension of the changes to the qualifying criteria and the payment
adjustment methodology for low-volume hospitals through the first half
of FY 2015 (that is, through March 31, 2015) in accordance with section
105 of the PAMA. Specifically, we proposed to revise paragraphs
(b)(2)(i), (b)(2)(ii), (c)(1), (c)(2), and (d) of Sec. 412.101. Under
these proposed changes to Sec. 412.101, beginning with FY 2015
discharges occurring on or after April 1, 2015, consistent with section
1886(d)(12) of the Act, as amended, the low volume hospital qualifying
criteria and payment adjustment methodology would revert to that which
was in effect prior to the amendments made by the Affordable Care Act
and subsequent legislation (that is, the low-volume hospital payment
policy in effect for FYs 2005 through 2010).
To implement the extension of the temporary change in the low-
volume hospital payment policy for the last 6 months of FY 2014
provided for by the PAMA, we are using the same data source to identify
qualifying low-volume hospitals and calculate the payment adjustment
(percentage increase) that was used to identify qualifying low-volume
hospitals and calculate the payment adjustment for discharges that
occurred during the first half of FY 2014 (that is, FY 2012 Medicare
discharge data from the March 2013 update of the MedPAR files), as
these data were the most recent data available at the time of the
development of the FY 2014 payment rates and factors established in the
FY 2014 IPPS/LTCH PPS final rule. This is consistent with our policy at
Sec. 412.101(b)(2)(ii), which states that a hospital's Medicare
discharges from the most recently available MedPAR data, as determined
by CMS, are used to determine if the hospital meets the discharge
criteria to
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receive the low-volume payment adjustment in the current year.
Accordingly, in Table 14 of this document (which is available only
through the Internet on the CMS Web site at http://www.cms.hhs.gov/AcuteInpatientPPS/01_overview.asp), we are providing the list of the
subsection (d) hospitals with fewer than 1,600 Medicare discharges
based on the March 2013 update of the FY 2012 MedPAR files and their FY
2014 low-volume payment adjustment, if eligible (Table 14 was
originally made available in connection with the FY 2014 IPPS IFC that
appeared in the March 18, 2014 Federal Register). We note that the list
of hospitals with fewer than 1,600 Medicare discharges in Table 14 does
not reflect whether or not the hospital meets the mileage criterion. A
hospital also must be located more than 15 road miles from any other
subsection (d) hospital in order to qualify for a low-volume hospital
payment adjustment for FY 2014 discharges occurring on or after April
1, 2014.
A hospital that qualified for the low-volume hospital payment
adjustment for its FY 2014 discharges occurring on or after October 1,
2013 through March 31, 2014 does not need to notify its MAC and will
continue to receive the applicable low-volume hospital payment
adjustment for its FY 2014 discharges occurring on or after April 1,
2014, without reapplying, provided it continues to meet the mileage
criterion (that is, the hospital continues to be located more than 15
road miles from any other subsection (d) hospital).
For a hospital that did not qualify for the low-volume hospital
payment adjustment for its FY 2014 discharges occurring on or after
October 1, 2013 through March 31, 2014, in order to receive a low-
volume hospital payment adjustment under Sec. 412.101, consistent with
our previously established procedure, we are continuing to require a
hospital to notify and provide documentation to its MAC that it meets
the mileage criterion. Specifically, the hospital must make its request
for low-volume hospital status in writing to its MAC and provide
documentation that it meets the mileage criterion, so that the
applicable low-volume percentage increase is applied to payments for
its discharges occurring on or after April 1, 2014. This written
request must be received by its MAC no later than June 30, 2014 in
order for the applicable low-volume percentage increase to be applied
to payments for the hospital's discharges beginning on or after April
1, 2014. In addition, a hospital that missed the request deadline for
FY 2014 discharges occurring before April 1, 2014 in the FY 2014 IPPS
IFC but qualified for the low-volume payment adjustment in FY 2013 may
receive a low-volume payment adjustment for its FY 2014 discharges
occurring on or after April 1, 2014 without reapplying if it continues
to meet the Medicare discharge criterion, based on the March 2013
update of the FY 2012 MedPAR data (shown in Table 14), and the mileage
criterion. However, the hospital must send written verification that is
received by its MAC no later than June 30, 2014, that it continues meet
the mileage criterion, that is, it is located more than 15 miles from
any other subsection (d) hospital. This procedure is similar to the
procedures we used to implement prior extensions of the Affordable Care
Act amendments to the low-volume hospital payment policy in the FY 2014
IPPS IFC (79 FR 15024 through 150025) and the FY 2013 IPPS notice of
extension (78 FR 14689).
For requests for low-volume hospital status for FY 2014 discharges
occurring on or after April 1, 2014 that are received by the MAC after
June 30, 2014, if the hospital meets the criteria to qualify as a low-
volume hospital, the MAC will apply the applicable low-volume
adjustment in determining payments to the hospital's FY 2014 discharges
occurring on or after April 1, 2014 prospectively effective within 30
days of the date of the MAC's low-volume status determination. This
procedure is similar to the policy we established for a hospital to
request low-volume hospital status for FY 2013 in the FY 2013 IPPS
notice of extension (78 FR 14689), as well as for FYs 2011 and 2012 in
the FY 2011 IPPS/LTCH PPS final rule (75 FR 50274 through 50275) and
the FY 2012 IPPS/LTCH PPS final rule (76 FR 51680), respectively.
The use of a Web-based mapping tool, such as MapQuest, as part of
documenting that the hospital meets the mileage criterion for low-
volume hospitals, is acceptable. The MAC will determine if the
information submitted by the hospital, such as the name and street
address of the nearest hospitals, location on a map, and distance (in
road miles, as defined in the regulations at Sec. 412.101(a)) from the
hospital requesting low-volume hospital status, is sufficient to
document that the hospital requesting low-volume hospital status meets
the mileage criterion. The MAC may follow up with the hospital to
obtain additional necessary information to determine whether or not the
hospital meets the low-volume hospital mileage criterion. In addition,
the MAC will refer to the hospital's Medicare discharge data determined
by CMS (as provided in Table 14, which is available only through the
Internet on the CMS Web site at http://www.cms.hhs.gov/AcuteInpatientPPS/01_overview.asp) to determine whether or not the
hospital meets the discharge criterion, and the amount of the payment
adjustment for FY 2014 discharges occurring on or after April 1, 2014,
once it is determined that the mileage criterion has been met. The
Medicare discharge data shown in Table 14, as well as the Medicare
discharge data for all subsection (d) hospitals with claims in the
March 2013 update of the FY 2012 MedPAR file, is also available on the
CMS Web site for hospitals to view the count of their Medicare
discharges. The data can be used to help hospitals decide whether or
not to apply for low-volume hospital status.
Program guidance on the systems implementation of these provisions,
including changes to PRICER software used to make payments, will be
announced in an upcoming transmittal. As stated previously, we proposed
to make conforming changes to the existing regulations text at Sec.
412.101 to reflect the extension of the changes to the qualifying
criteria and the payment adjustment methodology for low-volume
hospitals through the first half of FY 2015 (that is, through March 31,
2015) in accordance with section 105 of the PAMA.
B. Extension of the Medicare-Dependent, Small Rural Hospital (MDH)
Program
1. Background
Section 1885(d)(5)(G) of the Act provides special payment
protections, under the IPPS, to Medicare-dependent, small rural
hospitals (MDHs). (For additional information on the MDH program and
the payment methodology, we refer readers to the FY 2012 IPPS/LTCH PPS
final rule (76 FR 51683 through 51684). As we discussed in the FY 2011
IPPS/LTCH PPS final rule (75 FR 50287) and in the FY 2012 IPPS/LTCH PPS
final rule (76 FR 51683 through 51684), section 3124 of the Affordable
Care Act extended the expiration of the MDH program from the end of FY
2011 (that is, for discharges occurring before October 1, 2011) to the
end of FY 2012 (that is, for discharges occurring before October 1,
2012). Under prior law, as specified in section 5003(a) of Pub. L. 109-
171 (DRA 2005), the MDH program was to be in effect through the end of
FY 2011 only.
Since the extension of the MDH program through FY 2012 provided by
section 3124 of the ACA, the MDH program has been further extended
multiple times. First, section 606 of the
[[Page 34447]]
ATRA extended the MDH program through FY 2013 (that is, for discharges
occurring before October 1, 2013). (For additional information on the
extension of the MDH program for FY 2013 pursuant to section 606 of the
ATRA, see the notice of extension that appeared in the March 7, 2013
Federal Register (78 FR 14691 through 14692).) Second, section 1106 of
the Pathway for SGR Reform Act of 2013 extended the MDH program through
the first half of FY 2014 (that is, for discharges occurring before
April 1, 2014). In the FY 2014 IPPS IFC, we discussed the 6-month
extension of the MDH program from October 1, 2013 through March 31,
2014 provided by the Pathway for SGR Reform Act of 2013 (79 FR 15025
through 15027). In that IFC, we explained how providers may be affected
by this extension of the program and described the steps to reapply for
MDH status for FY 2014, as applicable. Generally, a provider that was
classified as an MDH as of September 30, 2013 was reinstated as an MDH
effective October 1, 2013, with no need to reapply for MDH
classification. However, if the MDH had classified as a sole community
hospital (SCH) or cancelled its rural classification under Sec.
412.103(g) effective on or after October 1, 2013, the effective date of
MDH status may not be retroactive to October 1, 2013.
Lastly, and under current law, section 106 of the PAMA provides for
a 1-year extension of the MDH program effective from April 1, 2014 to
March 31, 2015. Specifically, section 106 of the PAMA amended sections
1886(d)(5)(G)(i) and 1886(d)(5)(G)(ii)(II) of the Act by striking
``April 1, 2014'' and inserting ``April 1, 2015''. Section 106 of the
PAMA also made conforming amendments to sections 1886(b)(3)(D)(i) and
1886(b)(3)(D)(iv) of the Act. We note that because the extension
provided by section 106 of the PAMA spans 2 fiscal years, that is, FY
2014 and FY 2015, we only address the 6-month extension in FY 2014 in
this document. The extension of the MDH program through the first half
of FY 2015 was addressed in the FY 2015 IPPS/LTCH PPS proposed rule (79
FR 28104 through 28105), where we also proposed to make the conforming
changes to the regulations at Sec. 412.108(a)(1) and (c)(2)(iii) to
reflect the statutory extension of the MDH program through the first
half FY 2015 as provided by section 106 of the PAMA.
2. Provisions of the PAMA
Prior to the enactment of the PAMA, under section 1106 of the
Pathway to SGR Reform Act of 2013, the MDH program authorized by
section 1886(d)(5)(G) of the Act was set to expire midway through FY
2014 (that is, March 31, 2014). Section 106 of the PAMA amended
sections 1886(d)(5)(G)(i) and 1886(d)(5)(G)(ii)(II) of the Act to
provide for an additional 1-year extension of the MDH program,
effective from April 1, 2014 through March 31, 2015. Section 106 of the
PAMA also made conforming amendments to sections 1886(b)(3)(D)(i) and
1886(b)(3)(D)(iv) of the Act.
As noted previously, this document addresses the portion of the MDH
program extension that includes the last 6 months of FY 2014 as
provided by section 106 of PAMA. Consistent with our implementation of
previous MDH extensions (see 79 FR 15025 through 15027 and 78 FR 14691
through 14692), generally, providers that were classified as MDHs as of
the anticipated expiration of the MDH provision (that is, as of March
31, 2014) will be reinstated as MDHs effective April 1, 2014 with no
need to reapply for MDH classification. However, in the following two
situations, the effective date of MDH status may not be retroactive to
April 1, 2014.
a. MDHs That Classified as Sole Community Hospitals (SCHs) on or After
April 1, 2014
Our regulations at Sec. 412.92(b)(2)(v) would have permitted an
MDH that applied for reclassification as an SCH by March 1, 2014 to
have such status be effective on April 1, 2014. MDHs that applied by
the March 1, 2014 deadline and were approved for SCH classification
received SCH status effective April 1, 2014. Hospitals that applied for
SCH status after the March 1, 2014 SCH application deadline would have
been subject to the usual effective date for SCH classification, that
is, 30 days after the date of CMS' written notification of approval,
resulting in an effective date of SCH status after April 1, 2014.
In order to be reclassified as an MDH, these hospitals must first
cancel their SCH status according to Sec. 412.92(b)(4), because a
hospital cannot be both an SCH and an MDH, and then reapply and be
approved for MDH status under Sec. 412.108(b). Under Sec.
412.92(b)(4), a hospital's cancellation of its SCH classification
becomes effective no later than 30 days after the date the hospital
submits its request. Under Sec. 412.108(b)(3), the Medicare contractor
will make a determination regarding whether a hospital meets the
criteria for MDH status and notify the hospital within 90 days from the
date that it receives the hospital's request and all of the required
documentation. Under Sec. 412.108(b)(4), a determination of MDH status
made by the Medicare contractor is effective 30 days after the date the
fiscal intermediary (Note: fiscal intermediaries have been replaced by
Medicare Administrative Contractors (MACs)) provides written
notification to the hospital.
b. MDHs That Requested a Cancellation of Their Rural Classification
Under Sec. 412.103(b)
One of the criteria to be classified as an MDH is that the hospital
must be located in a rural area. To qualify for MDH status, some MDHs
reclassified from an urban to a rural hospital designation, under the
regulations at Sec. 412.103(b). With the anticipated March 31, 2014
expiration of the MDH provision prior to the enactment of the PAMA,
some of these providers may have requested a cancellation of their
rural classification. Therefore, in order to qualify for MDH status,
these hospitals must again request to be reclassified as rural under
Sec. 412.103(b) and must also reapply for MDH status under Sec.
412.108(b).
As noted previously, under Sec. 412.108(b)(3), the Medicare
contractor will make a determination regarding whether a hospital meets
the criteria for MDH status and notify the hospital within 90 days from
the date that it receives the hospital's request and all of the
required documentation. Under Sec. 412.108(b)(4), a determination of
MDH status made by the Medicare contractor is effective 30 days after
the date the fiscal intermediary (MAC) provides written notification to
the hospital.
Any provider that falls within either of the two exceptions listed
previously may not have its MDH status automatically reinstated
effective April 1, 2014. That is, if a provider reclassified to SCH
status or cancelled its rural status effective April 1, 2014, its MDH
status will not be retroactive to April 1, 2014, but will instead be
applied prospectively, based on the date the hospital is notified that
it again meets the requirements for MDH status, in accordance with
Sec. 412.108(b)(4), after the hospital reapplies for MDH status. Once
granted, this MDH status will remain in effect through March 31, 2015,
subject to the requirements at Sec. 412.108. However, if a provider
reclassified to SCH status or cancelled its rural status effective on a
date later than April 1, 2014, MDH status will be reinstated effective
from April 1, 2014, but will end on the date on which the provider
changed its status to an SCH or cancelled its rural status. Those
hospitals may also reapply for MDH
[[Page 34448]]
status to be effective again 30 days from the date the hospital is
notified of the determination, in accordance with Sec. 412.108(b)(4).
Once granted, this status will remain in effect through March 31, 2015
subject to the requirements at Sec. 412.108. Providers that fall
within either of the two exceptions, in order to reclassify as an MDH,
will have to reapply for MDH status according to the classification
procedures in 42 CFR 412.108(b). Specifically, the regulations at Sec.
412.108(b) require the following:
The hospital submit a written request along with
qualifying documentation to its contractor to be considered for MDH
status.
The contractor make its determination and notify the
hospital within 90 days from the date that it receives the request for
MDH classification and all required documentation.
The determination of MDH status be effective 30 days after
the date of the contractor's written notification to the hospital.
The following are examples of various scenarios that illustrate how
and when MDH status under section 106 of the PAMA will be determined
for hospitals that were MDHs as of the anticipated March 31, 2014
expiration of the MDH program:
Example 1: Hospital A was classified as an MDH as of the
anticipated March 31, 2014 expiration of the MDH program. Hospital A
retained its rural classification and did not reclassify as an SCH.
Hospital A's MDH status will be automatically reinstated
retroactively to April 1, 2014.
Example 2: Hospital B was classified as an MDH as of the
anticipated March 31, 2014 expiration of the MDH program. Per the
regulations at Sec. 412.92(b)(2)(v) and in anticipation of the
expiration of the MDH program, Hospital B applied for
reclassification as an SCH by March 1, 2014, and was approved for
SCH status effective on April 1, 2014. Hospital B's MDH status will
not be automatically reinstated. In order to reclassify as an MDH,
Hospital B must first cancel its SCH status, in accordance with
Sec. 412.92(b)(4), and reapply for MDH status under the regulations
at Sec. 412.108(b).
Example 3: Hospital C was classified as an MDH as of the
anticipated March 31, 2014 expiration of the MDH program. Hospital C
missed the application deadline of March 1, 2014 for
reclassification as an SCH under the regulations at Sec.
412.92(b)(2)(v) and was not eligible for its SCH status to be
effective as of April 1, 2014. The MAC approved Hospital C's request
for SCH status effective May 16, 2014. Hospital C's MDH status will
be reinstated but only for the portion of time during which it met
the criteria for MDH status. Hospital C's MDH status will be
reinstated effective April 1, 2014 through May 15, 2014, and its MDH
status will be cancelled effective May 16, 2014. In order to
reclassify as an MDH, Hospital C must cancel its SCH status, in
accordance Sec. 412.92(b)(4), and reapply for MDH status under the
regulations at Sec. 412.108(b).
Example 4: Hospital D was classified as an MDH as of the
anticipated March 31, 2014 expiration of the MDH program. In
anticipation of the expiration of the MDH program, Hospital D
requested that its rural classification be cancelled per the
regulations at Sec. 412.103(g). Hospital D's rural classification
was cancelled effective April 1, 2014. Hospital D's MDH status will
not be automatically reinstated. In order to reclassify as an MDH,
Hospital D must first request to be reclassified as rural under
Sec. 412.103(b) and must reapply for MDH status under Sec.
412.108(b).
Example 5: Hospital E was classified as an MDH as of the
anticipated March 31, 2014 expiration of the MDH program. In
anticipation of the expiration of the MDH program, Hospital E
requested that its rural classification be cancelled per the
regulations at Sec. 412.103(g). Hospital E's rural classification
is cancelled effective June 1, 2014. Hospital E's MDH status will be
reinstated but only for the period of time during which it met the
criteria for MDH status. Since Hospital E cancelled its rural status
and is classified as urban effective June 1, 2014, MDH status will
only be reinstated effective April 1, 2014 through May 31, 2014, and
will be cancelled effective June 1, 2014. In order to reclassify as
an MDH, Hospital E must first request to be reclassified as rural
under Sec. 412.103(b) and must reapply for MDH status under Sec.
412.108(b).
Finally, we note that hospitals continue to be bound by Sec.
412.108(b)(4)(i) through (iii) to report a change in the circumstances
under which the status was approved. Thus, if a hospital's MDH status
has been extended and it no longer meets the requirements for MDH
status, it is required under Sec. 412.108(b)(4)(i) through (iii) to
make such a report to its MAC. Additionally, under the regulations at
Sec. 412.108(b)(5), Medicare contractors are required to evaluate on
an ongoing basis whether or not a hospital continues to qualify for MDH
status.
As noted previously, we proposed to make conforming changes to the
regulations at Sec. 412.108(a)(1) and (c)(2)(iii) to reflect the
statutory extension of the MDH program through March 31, 2015 as
provided by section 106 of the PAMA in the FY 2015 IPPS/LTCH PPS
proposed rule (79 FR 28104 through 28105). Program guidance on the
systems implementation of these provisions, including changes to PRICER
software used to make payments, will be announced in an upcoming
transmittal. A provider affected by the MDH program extension will
receive a notice from its MAC detailing its status in light of the MDH
program extension.
We also note that the same approach for the additional payment for
uncompensated care under Sec. 412.106(g) discussed in the FY 2014 IPPS
IFC (79 FR 15027) will apply in determining MDH payments for FY 2014
discharges occurring on or after April 1, 2014. That is, a pro rata
share of the uncompensated care payment amount for that period will be
included as part of the Federal rate payment in the comparison of
payments under the hospital-specific rate and the Federal rate.
Therefore, in making this comparison at cost report settlement, we will
include the pro rata share of the uncompensated care payment amount
that reflects the period of time the hospital was paid under the MDH
program for its FY 2014 discharges occurring on or after April 1, 2014
and before September 30, 2014. This pro rata share will be determined
based on the proportion of the applicable Federal fiscal year that is
included in that cost reporting period. (For additional information on
our implementation of the additional payment for uncompensated care
under Sec. 412.106(g), refer to the FY 2014 IPPS/LTCH PPS final rule
(78 FR 50620 through 50647) and the interim final rule with comment
period titled ``FY 2014 IPPS Changes to Certain Cost Reporting
Procedures Related to Disproportionate Share Hospital Uncompensated
Care Payments'' that appeared in the October 3, 2013 Federal Register
(78 FR 61191 through 61194).)
3. The Treatment of MDHs Under the Hospital Readmissions Reduction
Program and the Hospital Value-Based Purchasing (VBP) Program for FY
2014
The Hospital Readmissions Reduction Program at section 1886(q) of
the Act requires the Secretary to reduce payments to applicable
hospitals with excess readmissions effective for discharges beginning
on or after October 1, 2012. Section 1886(o) of the Act requires the
Secretary to establish a hospital value-based purchasing program (the
Hospital Value-Based Purchasing (VBP) Program), effective for
discharges beginning on or after October 1, 2012, under which value-
based incentive payments are made in a fiscal year to hospitals that
meet performance standards established for a performance period for
such fiscal year. In general, the adjustments under both the Hospital
Readmissions Reduction Program and Hospital VBP Program are applicable
to MDHs (except when certain exclusions from the Hospital VBP Program
are met).
The payment methodology under the Hospital Readmissions Reduction
[[Page 34449]]
Program and Hospital VBP Program applies each program's adjustment
factors respectively to the ``base operating DRG payment amount.'' (For
additional information on the calculation of the adjustment factor and
payment methodology under the Hospital Readmissions Reduction Program,
refer to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53374 through
53391). For additional information on the calculation of the adjustment
factor and payment methodology under the Hospital VBP Program, refer to
the FY 2013 IPPS/LTCH PPS final rule (77 FR 53569 through 53576).) The
``base operating DRG payment amount'' is generally defined as the wage-
adjusted DRG operating payment plus any applicable new technology add-
on payments (see Sec. 412.152 and Sec. 412.160). For years prior to
FY 2014, the statutory provisions related to the definition of ``base
operating DRG payment amount'' under section 1886(q) of the Act and
section 1886(o) of the Act excluded the difference between an MDH's
applicable hospital-specific payment (HSP) rate and the Federal payment
rate (referred to as the HSP add-on) from the definition of the base
operating DRG payment amount. (MDHs are paid based on the Federal rate
or, if higher, the Federal rate plus 75 percent of the amount by which
the Federal rate is exceeded by the updated HSP rate from certain
specified base years. Thus for MDHs, the HSP add-on for these years is
equal to 75 percent of the difference between the Federal rate payment
and HSP rate payment. At cost report settlement, the MAC determines
which of the payment options yields a higher aggregate payment for an
MDH, and also determines the final HSP add-on (if applicable) for that
MDH for each cost reporting period.)
The treatment of MDHs under the Hospital Readmissions Reduction
Program and the Hospital VBP Program for FY 2014 was not addressed in
the FY 2014 IPPS/LTCH PPS final rule because at the time of the
publication of that final rule, the MDH program was set to expire at
the end of FY 2013. Accordingly, the payment adjustment factors and
payment methodology for FY 2014 under both the Hospital Readmissions
Reduction Program and Hospital VBP Program established in that final
rule were determined without regard to HSP add-on payments to MDHs.
That is, for hospitals that were MDHs, the FY 2014 readmissions and
value-based incentive payment adjustment factors were calculated using
base operating DRG payment amounts that do not include the difference
between the HSP payment rate and the Federal payment rate (as
applicable). Similarly, in determining payments for MDH discharges
occurring in FY 2014, the base operating DRG payment amounts currently
also do not include the difference between the HSP payment rate and the
Federal payment rate (as applicable).
As discussed previously, subsequent to the publication of the FY
2014 IPPS/LTCH PPS final rule, the MDH program was extended from
October 1, 2013, to March 31, 2014, by section 1106 of the Pathway for
SGR Reform Act (Pub. L. 113-67) and was further extended an additional
year from April 1, 2014, to March 31, 2015, by section 106 of the
Protecting Access to Medicare Act of 2014 (Pub. L. 113-93). This
legislation extended the MDH program by amending sections
1886(d)(5)(G)(i) and 1886(d)(5)(G)(ii)(II) of the Act and also made
conforming amendments to sections 1886(b)(3)(D)(i) and
1886(b)(3)(D)(iv) of the Act. Given the extension of the MDH program
for FY 2014, in this document we discuss how the payment methodology
under both the Hospital Readmissions Reduction Program and Hospital VBP
Program will be applied for MDH discharges occurring during FY 2014,
consistent with the sections 1886(q)(2)(B)(i) and 1886(o)(7)(D)(i)(I)
of the Act.
We are not revising the FY 2014 readmissions and value-based
incentive payment adjustment factors that we established through notice
and comment rulemaking in the FY 2014 IPPS/LTCH PPS final rule because
at the time we established those factors, the MDH program was set to
expire at the end of FY 2013. Therefore, the FY 2014 Readmissions
Adjustment Factors in Table 15 of the FY 2014 IPPS/LTCH PPS final rule
(as subsequently corrected by the FY 2014 IPPS/LTCH PPS final rule
correcting document that appeared in the October 3, 2013 Federal
Register) and the FY 2014 Hospital VBP Program Adjustment Factors in
Table 16B of the FY 2014 IPPS/LTCH PPS final rule (which are only
available on the Internet at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) will remain unchanged
and will continue to apply in determining payments for MDHs' discharges
occurring during FY 2014.
However, because a final payment determination for an MDH's cost
reporting period is not done until cost report settlement, if an MDH
ultimately receives the HSP add-on (that is, its final payment is
determined to be the Federal rate payment plus 75 percent of the amount
by which the Federal rate is exceeded by the updated HSP rate), then
additional adjustments under the Hospital Readmissions Reduction
Program and Hospital VBP Program (as applicable) will be made during
cost report settlement. If at cost report settlement an MDH ultimately
does not receive an HSP add-on for the cost reporting period (that is,
its final payment is determined to be the Federal rate payment only),
then no additional adjustment (if otherwise applicable) under the
Hospital Readmissions Reduction Program and Hospital VBP Program will
be made.
III. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995 (44 U.S.C. 35).
IV. Waiver of Proposed Rulemaking and Delay of Effective Date
We ordinarily publish a notice of proposed rulemaking in the
Federal Register and invite public comment prior to a rule taking
effect in accordance with section 553(b) of the Administrative
Procedure Act (APA) and section 1871 of the Act. In addition, in
accordance with section 553(d) of the APA and section 1871(e)(1)(B)(i)
of the Act, we ordinarily provide a 30-day delay to a substantive
rule's effective date. For substantive rules that constitute major
rules, in accordance with 5 U.S.C. 801, we ordinarily provide a 60-day
delay in the effective date. None of the processes or effective date
requirements apply, however, when the rule in question is interpretive,
a general statement of policy, or a rule of agency organization,
procedure or practice. They also do not apply when the statute
establishes rules to be applied, leaving no discretion or gaps for an
agency to fill in through rulemaking. In addition, an agency may waive
notice and comment rulemaking, as well as any delay in effective date,
when the agency for good cause finds that notice and public comment on
the rule as well the effective date delay are impracticable,
unnecessary, or contrary to the public interest. In cases where an
agency finds good cause, the agency must incorporate a statement of
this finding and its reasons in the rule issued.
The policies being publicized in this document do not constitute
agency rulemaking. Rather, the statute, as amended by the PAMA, has
already
[[Page 34450]]
required that the agency make these changes, and we are simply
notifying the public of the extension of the changes to the payment
adjustment for low-volume hospitals and the MDH program that was
effective April 1, 2014. As this document merely informs the public of
these extensions, it is not a rule and does not require any notice and
comment rulemaking. To the extent any of the policies articulated in
this document constitute interpretations of the statute's requirements
or procedures that will be used to implement the statute's directive,
they are interpretive rules, general statements of policy, and rules of
agency procedure or practice, which are not subject to notice and
comment rulemaking or a delayed effective date.
However, to the extent that notice and comment rulemaking or a
delay in effective date or both would otherwise apply, we find good
cause to waive such requirements. Specifically, we find it unnecessary
to undertake notice and comment rulemaking in this instance as this
document does not propose to make any substantive changes to the
policies or methodologies already in effect as a matter of law, but
simply applies rate adjustments under the PAMA to these existing
policies and methodologies. As the changes outlined in this document
have already taken effect, it would also be impracticable to undertake
notice and comment rulemaking. For these reasons, we also find that a
waiver of any delay in effective date, if it were otherwise applicable,
is necessary to comply with the requirements of the PAMA. Therefore, we
find good cause to waive notice and comment procedures as well as any
delay in effective date, if such procedures or delays are required at
all.
V. Regulatory Impact Analysis
A. Introduction
We have examined the impacts of this document as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), Executive Order 13563 on Improving Regulation and Regulatory
Review (January 18, 2011), the Regulatory Flexibility Act (RFA)
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995
(Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999),
and the Congressional Review Act (5 U.S.C. 804(2)). Executive Orders
12866 and 13563 direct agencies to assess all costs and benefits of
available regulatory alternatives and, if regulation is necessary, to
select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects,
distributive impacts, and equity). Executive Order 13563 emphasizes the
importance of quantifying both costs and benefits, of reducing costs,
of harmonizing rules, and of promoting flexibility. A regulatory impact
analysis (RIA) must be prepared for regulatory actions with
economically significant effects ($100 million or more in any 1 year).
Although we do not consider this document to constitute a substantive
rule or regulatory action, the changes announced in this document are
''economically'' significant, under section 3(f)(1) of Executive Order
12866, and therefore we have prepared a RIA, that to the best of our
ability, presents the costs and benefits of the provisions announced in
this document. In accordance with Executive Order 12866, this document
has been reviewed by the Office of Management and Budget.
The RFA requires agencies to analyze options for regulatory relief
of small businesses, if a rule has a significant impact on a
substantial number of small entities. For purposes of the RFA, small
entities include small businesses, nonprofit organizations, and small
government jurisdictions. We estimate that most hospitals and most
other providers and suppliers are small entities as that term is used
in the RFA. The great majority of hospitals and most other health care
providers and suppliers are small entities, either by being nonprofit
organizations or by meeting the Small Business Administration
definition of a small business (having revenues of less than $7.5 to
$35.5 million in any 1 year). (For details on the latest standard for
health care providers, we refer readers to page 33 of the Table of
Small Business Size Standards at the Small Business Administration's
Web site at http://www.sba.gov/services/contractingopportunities/sizestandardstopics/tableofsize/index.html.) For purposes of the RFA,
all hospitals and other providers and suppliers are considered to be
small entities. Individuals and States are not included in the
definition of a small entity. We believe that this document will have a
significant impact on small entities. Because we acknowledge that many
of the affected entities are small entities, the analysis discussed in
this section would fulfill any requirement for a final regulatory
flexibility analysis. In addition, section 1102(b) of the Act requires
us to prepare a regulatory impact analysis if a rule may have a
significant impact on the operations of a substantial number of small
rural hospitals. This analysis must conform to the provisions of
section 604 of the RFA. With the exception of hospitals located in
certain New England counties, for purposes of section 1102(b) of the
Act, we now define a small rural hospital as a hospital that is located
outside of an urban area and has fewer than 100 beds.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
(Pub. L. 104-4) also requires that agencies assess anticipated costs
and benefits before issuing any rule whose mandates require spending in
any 1 year of $100 million in 1995 dollars, updated annually for
inflation. In 2014, that threshold is approximately $141 million. This
document will not mandate any requirements for State, local, or tribal
governments, nor will it affect private sector costs.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. This document will not have a substantial effect on State
and local governments.
Although this document merely reflects the implementation of two
provisions of the PAMA and does not constitute a substantive rule, we
nevertheless prepared this impact analysis in the interest of ensuring
that the impacts of these changes are fully understood. The following
analysis, in conjunction with the remainder of this document,
demonstrates that this document is consistent with the regulatory
philosophy and principles identified in Executive Order 12866 and
13563, the RFA, and section 1102(b) of the Act. The changes announced
in this document will positively affect payments to a substantial
number of small rural hospitals and providers, as well as other classes
of hospitals and providers, and the effects on some hospitals and
providers may be significant. The impact analysis, which discusses the
effect on total payments to IPPS hospitals and providers, is presented
in this section.
B. Statement of Need
This document is necessary to update the FY 2014 IPPS final payment
policies to reflect changes required by the implementation of two
provisions of the PAMA. Section 105 of the PAMA extends the temporary
changes to the payment adjustment for low-volume
[[Page 34451]]
hospitals from April 1, 2014 through March 31, 2015. Section 106 of the
PAMA extends the MDH program from April 1, 2014 through March 31, 2015.
As noted previously, program guidance on the systems implementation of
these provisions, including changes to PRICER software used to make
payments, will be announced in an upcoming transmittal.
C. Overall Impact
The FY 2014 IPPS/LTCH PPS final rule and the FY 2014 IPPS IFC
included an impact analysis for the changes to the IPPS included in
those rules. This document updates those impacts to the IPPS to reflect
the changes made by sections 105 and 106 of the PAMA. Since these
sections were not budget neutral, the overall estimates for hospitals
have changed from our estimates that were published in the FY 2014
IPPS/LTCH PPS final rule (78 FR 51037) and the FY 2014 IPPS IFC (79 FR
15029 and 15030). We estimate that the changes in the FY 2014 IPPS
payments, including the changes announced in this document, will result
in an approximate $1.68 billion increase in total payments to IPPS
hospitals relative to FY 2013 rather than the $1.44 billion increase we
projected in the FY 2014 IPPS IFC (79 FR 15029).
D. Anticipated Effects
The impact analysis reflects the change in estimated payments to
IPPS hospitals in FY 2014 as a result of the implementation of sections
105 and 106 of the PAMA relative to the revised estimated FY 2014
payments to IPPS hospitals that were published in the FY 2014 IPPS IFC
(79 FR 15029), which include both the estimated FY 2014 IPPS payments
from the provisions implemented in that IFC in addition to the
estimated FY 2014 IPPS payments published in the FY 2014 IPPS/LTCH PPS
final rule (78 FR 51037). As described later in this regulatory impact
analysis, FY 2014 IPPS payments to hospitals affected by sections 105
and 106 of the PAMA are projected to increase by $227 million (relative
to the FY 2014 payments estimated for these hospitals for the FY 2014
IPPS IFC). Therefore, we project that, on the average, overall IPPS
payments in FY 2014 for all hospitals will increase by approximately an
additional 0.24 percent as a result of the estimated $227 million
increase in payments due to the implementation of sections 105 and 106
of the PAMA compared to the previous estimate of FY 2014 payments to
all IPPS hospitals published in the FY 2014 IPPS IFC.
1. Effects of the Extension of the Temporary Changes to the Payment
Adjustment for Low-Volume Hospitals
The extension of the temporary changes to the payment adjustment
for low-volume hospitals (originally provided for by the Affordable
Care Act) for the last 6 months of FY 2014 (that is, for April 1, 2014
through September 30, 2014) as provided for under section 105 of the
PAMA is a non-budget neutral payment provision. The provisions of the
Affordable Care Act expanded the definition of low-volume hospital and
modified the methodology for determining the payment adjustment for
hospitals meeting that definition. Prior to the enactment of the PAMA,
beginning April 1, 2014, the low-volume hospital definition and payment
adjustment methodology was to return to the statutory requirements that
were in effect prior to the amendments made by the Affordable Care Act
and extended by subsequent legislation. With the extension for the last
6 months of FY 2014 (that is, April 1, 2014 through September 30,
2014), provided for by the PAMA, based on FY 2012 claims data (March
2013 update of the MedPAR file), we estimate that approximately 600
hospitals will qualify as a low-volume hospital through September 30,
2014. We project that these hospitals will experience an increase in
payments of approximately $161 million as compared to our previous
estimate of payments to these hospitals for FY 2014 published in the FY
2014 IPPS IFC.
2. Effects of the Extension of the MDH Program
The extension of the MDH program for the last 6 months of FY 2014
(that is, from April 1, 2014 through September 30, 2014) as provided
for under section 106 of the PAMA is a non-budget neutral payment
provision. Hospitals that qualify as a MDHs receive the higher of
operating IPPS payments made under the Federal standardized amount or
the payments made under the Federal standardized amount plus 75 percent
of the difference between the Federal standardized amount and the
hospital-specific rate. Because this provision is not budget neutral,
we estimate that the extension of this payment provision for the last 6
months of FY 2014 will result in a 0.1-percent increase in payments
overall. Prior to the extension of the MDH program, there were 198
MDHs, of which 118 were estimated to be paid under the blended payment
of the Federal standardized amount and hospital-specific rate through
April 1, 2014. Because those 118 MDHs will now receive the blended
payment (that is, the Federal standardized amount plus 75 percent of
the difference between the Federal standardized amount and the
hospital-specific rate) for the second half of FY 2014 (from April 1,
2014 through September 30, 2014), we estimate that those hospitals will
experience an overall increase in payments of approximately $66 million
as compared to our previous estimate of payments to these hospitals for
FY 2014 published in the FY 2014 IPPS IFC.
E. Alternatives Considered
This document provides descriptions of the statutory provisions
that are addressed and identifies policies for implementing these
provisions. Due to the prescriptive nature of the statutory provisions,
no alternatives were considered.
F. Accounting Statement and Table
As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars_a004_a-4), in Table I, we have
prepared an accounting statement showing the classification of
expenditures associated with the provisions of this document as they
relate to acute care hospitals. This table provides our best estimate
of the change in Medicare payments to providers as a result of the
changes to the IPPS presented in this document. All expenditures are
classified as transfers from the Federal government to Medicare
providers. As previously discussed, relative to what was projected in
the FY 2014 IPPS IFC, the changes to FY 2014 IPPS payments made by
sections 105 and 106 of the PAMA presented in this document are
projected to increase FY 2014 payments to IPPS hospitals by
approximately $227 million.
[[Page 34452]]
Table I--Accounting Statement: Classification of Estimated Expenditures
Under the IPPS From Published FY 2014 to Revised FY 2014
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............ $227 million.
From Whom to Whom......................... Federal Government to IPPS
Medicare Providers.
-----------------------------
Total................................... $227 million.
------------------------------------------------------------------------
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: June 3, 2014.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
Approved: June 11, 2014.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2014-14070 Filed 6-12-14; 11:15 am]
BILLING CODE 4120-01-P